With research expected to make up $135.966 million (22.2%) of overall income next year - down from 22.9% of income this year - the challenging research environment represents a major hurdle for the university.
Deputy vice-chancellor research and enterprise Prof Richard Blaikie said in the university's budget for next year - tabled at this week's council meeting - the ''overall research funding environment continues to be challenging''.
This comes after ''disappointments'' this year meant income from both the Performance-Based Research Fund (PBRF) and externally funded research failed to meet expectations.
''Otago continues to be the lead university in Marsden funding ($15 million in 2012), but there were headline disappointments in Health Research Council ($16.8 million) and Ministry of Business, Innovation and Employment funding ($1 million).
''There is a consciousness that with the drop in funding from PBRF this year, and a lesser amount of the pie than might have been expected over the next few years, there will need to be focus on other opportunities,'' Prof Blaikie said.
Areas in which the university would likely be successful in future included the national science challenges and bidding for extra funding for centres of research excellence. Overall research income was expected to decline next year. Externally funded research would fall 5% from the $84.438 million expected this year, to $80.459 million next year.
This was slightly offset by a 3.8% increase in PBRF income from $53.474 million expected this year to $55.507 million next year, but this increase was less than expected.
